I. Supply factors
As a physical object, the supply of silver under objective conditions will also directly affect its price change. Mainly includes:
(1) Spot silver spot ground inventory
The global spot silver137,400 tons, and the ground spot silver stock grows at a rate of 2% every year.
(2) Annual supply and demand
The annual supply and demand of spot silver is about 4,200 tons, and the newly produced spot silver accounts for 62% of the annual supply.
(3) New gold mining costs
The average total cost of spot silver mining is slightly lower than $260 per ounce. Due to the development of mining technology, the development cost of spot silver has been declining in recent 20 years.
(4) Political, military and economic changes in spot silver producing countries.
Any political and military turmoil in these countries will undoubtedly directly affect the spot silver production in this country, and then affect the world spot silver supply.
(5) The central bank sells spot silver.
The central bank is the largest holder of spot silver in the world. 1969 The official spot silver reserve was 36,458 tons, accounting for 42.6% of the total spot silver inventory on the surface at that time. By 1998, the official spot silver reserve is about 34,000 tons, accounting for 24. 1% of the total mined spot silver stock. According to the production capacity, this is equivalent to the number of spot silver mines in the world 13. As the main use of spot silver has gradually changed from an important reserve asset to a metal raw material for jewelry production, or to improve the balance of payments, or to suppress the international gold price, the central bank's spot silver reserves have greatly declined in both absolute and relative quantities in the past 30 years, and the decline in quantity mainly depends on selling spot silver reserves in the spot silver market.
Second, the demand factor
The change of demand will also have a direct relationship with the spot silver price. This is mainly considered from the following aspects.
(1) In terms of demand for finished ornaments and electronic parts.
(2) In order to preserve the value, spot silver reserves have always been regarded by the central bank as an important means to prevent domestic inflation and regulate the market.
(3) Speculative demand: According to the international and domestic situation, speculators use the fluctuation of gold price in the spot silver market and the trading system in the spot silver futures market to "short" or "cover" spot silver in large quantities, artificially creating the illusion of spot silver demand.
Third, other factors.
This aspect is mainly related to the impact of the international situation, including the impact of the US dollar exchange rate, inflation, international political turmoil, wars and so on.